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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

Remittance Basis: Introduction to the Remittance Basis: Comparisons with pre-April 2008 regime: Changes to old regime - cash only

Before 6 April 2008, relevant foreign income was taxed only if it was brought into the UK as cash. An individual using remittance basis in respect of his relevant foreign income was able to turn relevant foreign income into an asset outside the UK; they could then bring that asset to the UK without attracting a charge unless and until the asset was sold or otherwise realised for cash in the UK.


In May 2004 Illianovic used her Isle of Man bank interest (RDRM31140 relevant foreign income) to acquire a car in the Isle of Man; she then arranged for the car to be shipped to the UK to use for her daily commute to Manchester. In May 2007 she sold the car to a dealer in Manchester for £5,000.

For years before 2008-09 no UK tax could be charged on the relevant foreign income remitted to the UK in the form of the car (i.e. in May 2004). There was no chargeable remittance until the car was sold for cash in the UK in May 2007.

Following Finance Act 2008 relevant foreign income remitted to the UK in any form is treated as a taxable remittance of the individual whose relevant foreign income it is.

It should be noted that the situation described above only applies to relevant foreign income. If in the example above Illianovic had used foreign employment income or gains there would be a remittance to the UK that would be chargeable in the year the asset was brought in to the UK, both before and after the Finance Act 2008 changes.